Advisory warns of fraud, financial crimes related to economic stimulus payments

Fraud and other financial crimes related to economic stimulus payments (EIPs) made by the federal government last spring and just last month are the subjects of an advisory released Wednesday by the Treasury Department’s financial crimes arm.

In a release, the Treasury’s Financial Crimes Enforcement Network (FinCEN) said the fraud attempts were aimed at payments made to consumers as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act from March 2020, and the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 of late December.

FinCEN said the advisory (FIN-2021-A002) contains descriptions of EIP fraud, associated red flag indicators, and information on reporting suspicious activity. The alert, the agency said, is part of a series published by FinCEN on COVID-19-related frauds and criminal activity.

All in all, the alert outlines 14 “red flag” indicators of fraud related to the stimulus payments. “As no single financial red flag indicator is necessarily indicative of illicit or suspicious activity, financial institutions should consider all surrounding facts and circumstances before determining if a transaction is suspicious or otherwise indicative of potentially fraudulent activities related to COVID-19,” the advisory states. ”In line with a risk-based approach to compliance with the BSA (Bank Secrecy Act), financial institutions also are encouraged to perform additional inquiries and investigations where appropriate.”

The advisory also lists six typical examples of fraud attempted with EIPs, including: fraudulent, altered, and counterfeit checks; theft of EIPs; “phishing schemes” using EIP as a “lure”; and inappropriate seizure of an EIP.

The agency said the advisory is based on FinCEN’s analysis of COVID-19-related information obtained from BSA data, public reporting, and law enforcement partners.

FIN-2021-A002: Advisory on Financial Crimes Targeting COVID-19 Economic Impact Payments

FIN-2021-NTC1: Consolidated COVID-19 Suspicious Activity Report Key Terms and Filing Instructions